Is Your Corporate Culture Creating Dishonest Employees?

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Does the exhilaration of catching employees who steal from your company still give you that butterfly feeling in your stomach? Is it because you just got rid of that problem or because you solved the situation entirely? But did you only take care of the symptoms? Is the underlying cause of the disease still around? Ask yourself: is the problem the employees, or is it the culture within your organization?

As we start out early in our careers, catching dishonest employees who steal becomes second nature. I remember a conversation with one of my peers and having to conclude the conversation because it was time for a phone interview—again. The conversations that focused on dishonesty were so frequent that it didn’t seem any different to speak with dishonest people as it did to speak to anyone else. I wondered why the butterfly feeling was turning into a feeling of frustration for me. It seemed like no matter how many people were caught, more would always follow. I couldn’t get a grasp on controlling a number of people who decided that it was justified to steal from the organization.

It took me a long time to realize that there are many more contributing factors to workplace dishonesty than just employees who need money. Dishonesty isn’t as simple as some would like to believe. It is complex in nature and often begins with the organization as a whole.

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The norms of the organization supersede any written policy and procedure. I began to understand that in order for me to combat this growing problem of deviance, I must uncover the root causes that contribute to it. Along my journey, I saw many examples of what causes the problems, what combats the problem, and the implications. I dug deeper into the underlying cause of the issues and watched how supervisory level employees’ behavior directly impacted the decision of their subordinates to either remain honest or become dishonest.

As a result of research and experience, I created a program titled “Building a Culture of Integrity.” The program is a guide to creating an atmosphere of open communication, trust, and integrity.

Where Does the Breakdown Occur?

I conducted a phone interview with a female associate who was working her last day. During the course of the interview, she admitted to stealing an excessive number of watches. When asked what she did with the watches, she replied that she just gave them away. I asked again if there was any monetary gain from her actions, she said no.

My next question opened the book on what caused her behavior: “Why would you risk so much for so little?” She told me that when she was initially hired, it was for one specific brand. She really enjoyed working on that brand and considered herself to be doing well. For some reason, she was transferred to a different brand that she knew little about. The manager told her it would only be temporary. Right from the beginning, she had problems with the clique that was already formed in the new location. She addressed her concerns with the manager, and he kept telling her to be patient. Months passed, and the manager continued to string her along with the same response: “I’m working on it.” Eventually, the associate knew the manager had no intention to move her back.

Her frustration with the situation and the lack of support from her direct supervisor became unbearable. She found a way to get even. As everyone in the store knew, the manager is responsible for the inventory results, so that was the first place she attacked. She figured that stealing the product would make him look bad during inventory because he didn’t know where it went.

This type of illogical reasoning is prevalent in some organizations and is perpetuated by the situation. If the manager had been honest and openly communicated what he could and could not do, perhaps the outcome would have been different. Ultimately, it is the employees’ choice, but as in this case, the manager played a role in why it occurred in the first place.

Reporting Information: A Field Manager’s Perspective

A field manager who had been with the organization for a long time came across information that was alarming. He inadvertently received a report showing information he knew to be fraudulent. This is an individual who prides himself on integrity and doing the right thing. To make matters worse, his direct supervisor had created the report. At this point there were two choices—pretend he never saw the report in the first place or report what he knew. He made the tough choice and decided to report the information. A long investigation followed and in the end the person who provided fraudulent information was terminated. I asked the field manager to participate in a question-and-answer discussion about the incident. Following is a recap of what was said:

At this point, there were two choices: pretend he never saw the report in the first place or share what he knew. He made the tough choice and decided to report the information. A long investigation followed. In the end, the person who provided fraudulent information was terminated. I asked the field manager to participate in a discussion about the incident. Following is a recap of what was said:

What did you think when you first saw the false information?

Shocked and insecure because I felt this was someone who I could trust and look up to. I felt I had to do the right thing and report this.

How did it make you feel about your boss? About the company?

He lost all credibility in my eyes, and I was confused as to why he would do such a thing. It may seem small to some, but to me, it was a big deal and placed doubt on his character. It made me question how much of what he stood for was real and truthful.

What did you want to do? What did you do?

I felt an obligation to the organization and confided in people I trusted. They agreed with my feelings to go forward and report this unfortunate situation. Knowing this was the right thing to do, I had to clear my conscience. This wasn’t something I wanted hanging over my head.

How did you feel when you did it?

I felt better knowing I did the right thing, although I have to admit I had post-anxiety and worried that he may have figured out that I was the one to come forward. I realized I had to put my faith into the system, and I did have a high level of trust with the individual heading the investigation.

Were you reluctant to provide the information and if so why?

I really wasn’t reluctant to divulge the information…maybe a bit hesitant because I worried about retaliation, but I knew I was doing the right thing.

What were you thinking in between the time you provided the information and the termination?

I was nervous because I had lost all trust and confidence in the person I was reporting to. This is a person in whom I previously had a lot of faith. That was the stressful part; trust is a big deal to me.

How did you feel when it was all over?

Relieved and ready to move on. It was the toughest experience I had to endure. It wasn’t a feeling of satisfaction or excitement; rather it was a feeling of great faith in our company to do the right thing and support the level of integrity that is always talked about. No one is above the law and, in a company that does the right thing for the right reasons, integrity prevails.

What has become of you since the incident? Are you stronger as a result?

It has made me realize even more the importance of walking the talk and building the foundation of trust and honesty. It is what we expect, and we should always expect the same from ourselves. We live in an all-demanding world. Being real starts and ends with being you. A leader in our organization has a great deal of influence in people’s lives. Having seen both sides of the spectrum, I will always choose to be a positive influence versus one people learn from my short comings. That’s why we need to be consistent every day with our words and actions; they must align.

This person made a decision to act, but so many others will not report information for various reasons. Figure 1 represents the process of reporting unethical behavior and what gets in the way of doing so.

Organizations must encourage free-flowing communication without fear of retaliation. Managers must create an atmosphere where dishonesty is unacceptable, and only ethical behavior is rewarded.

Figure 1.

Doing It the Right Way

One regional director of operations in our organization is a phenomenal example of doing things the right way. Over the years, I have watched her lead people with the highest level of ethical standards. Biases and favoritism simply do not exist in her world. Employees are rewarded for a job well done and for following the rules.

In her book, sales do not surpass integrity. In an ever-growing competitive retail market, sales are often the front-runner over integrity, but not for this individual. She has witnessed some of her peers cheat on store statistics so they look better than they really are and never thought about doing the same thing. She says it is better to come out at the bottom by doing it the right way than by cheating to come out on top.

Her followers are very aware of what she thinks about rule breaking and very little “action” comes out of her area. Employees who are led by this individual feel respected, motivated, and a have a strong sense of pride for their own personal integrity. She has created an environment that welcomes truthfulness and applauds employees who take action against dishonesty. Some members of the loss prevention department have used her as a mentor for various topics because of her outstanding leadership skills.

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How hard is it really to lead people with the highest level of integrity? One would think that it would be rather simple if that is what you believe, but in reality, it is not. The pressure to meet financial goals in organizations can be overwhelming. People often start off trying to do things the right way, but if it isn’t quick enough to produce what is necessary, they choose a different road. The jump from doing the right thing to doing the wrong thing can become a small leap if the pressure from the top becomes unbearable. Even executives must continue to tell the people they lead that jeopardizing their personal integrity is no way to attain the goals the organization has laid out. That conversation could be the difference between someone making that leap or not.

Where Do We Go from Here?

As we know, dishonesty costs companies more than just the job of the employee who stole. Organizations have a responsibility to ensure that they are doing everything possible to reduce loss. So what else can be done?

In the mid-2000s, I began to look at dishonesty with a different view. I began to do research on how to combat this problem. Many of the materials discussed surveillance, exception reporting, and other methods similar in nature. After looking at what we were doing as an organization, it was determined that we were already doing these things, but we still had the problems. I decided that tackling the biggest contributor to dishonesty was the route we needed to go. The biggest contributor is the motivation to commit the act in the first place. I wanted to stop employees from ever wanting to take that first step.

To this end, I developed a core curriculum for a training program that would help create and sustain a culture of integrity within the company and enable employees to express their thoughts and opinions openly, honestly, and without fear of retaliation. The program was titled “Building a Culture of Integrity.”

Building a Culture of Integrity

The program comes with a participant’s workbook, facilitator’s guide, reference card, and PowerPoint presentation. The program focuses on six principles necessary to create an atmosphere of open communication, trust, and integrity. The six principles are

  • Tell the Truth—Keep things simple and do what is in the greater good of the organization.
  • Tackle the Problem—Address the current issue and listen to others’ points of view. Ensure follow-through occurs.
  • Disagree and Commit—Clarify and confront reality. Support the decision that is in the company’s best interest.
  • Welcome the Truth—Create a frictionless environment that will foster a climate of open communication.
  • Reward the Messenger—Encourage and reward those who tell the truth.
  • Build a Platform of Integrity—Create a sound, ethical infrastructure that people understand and follow.

Each of the six principles is followed by an exercise that is completed by the participants. The exercises are ethical dilemmas that require the participants to work through them for a solution. Everything is discussed as a group and suggestions are usually made if they don’t agree with the solutions. This allows the participants to hear that they are not alone in their battle and how others have solved some of the same problems. The program also teaches problem-solving and critical thinking with the exercises.

Costs and Selling the Program

The cost for the program is minimal if completed by an in-house facilitator. The program takes up to four hours to deliver effectively. The time can be cut down if necessary, but ensure that the key components are kept. If printed within the organization, the cost per booklet is approximately one dollar. The biggest cost is in taking employees away from their jobs to attend the program and for the facilitator to facilitate the program. The facilitator will need to learn the program and its content prior to delivery. The facilitator’s workbook provides a great outline of what to say and how to say it.

This type of program is not an easy sell. It is difficult to substantiate a return on investment in a program that is geared toward changing behavior. And there are no instant results.

The first step is a written business proposal that is submitted to either the head of training and development or the executive team. Providing a brief summary of the costs and benefits is critical to selling the idea. Below is an example of what can be incorporated into the cost/benefit section of the proposal:

  • If employees feel comfortable enough to have an open conversation with their supervisor without fear of retribution, the ethics compliance and business abuse line calls would decrease.
  • There are hidden costs associated with replacement of terminated associates and replacement of victims who leave the company because of integrity issues that are not addressed quickly enough to save the victim.
  • The culture of integrity program has virtually no cost because regional loss prevention and human resource managers will facilitate it as part of their productive responsibilities. The only cost would be the hours that attendees spend receiving the training.

Another point to touch on while selling the program is Sarbanes-Oxley. Organizations are responsible for implementing programs that reduce fraud. Simply putting up a poster with a hotline number isn’t enough if employees are afraid to call. This program teaches supervisors how to open their door to employees in order to receive critical information that could be adversely affecting the business. Within my own organization, many people from the Sarbanes-Oxley committee have contacted me to learn more about the program.

Results

Even though results are difficult to measure, the reviews from employees and field management have been great. Here is one of the comments from a regional manager who attended the program:

“I just wanted to take a moment to tell you how great your presentation of Building a Culture of Integrity was. It was not only informative, but also thought-provoking. I went into the presentation already feeling quite confident that it would be a great learning for store managers as well as a way in which to spark conversation around the topic. Having you there to present the materials allowed store managers to ask questions relevant to the topic and tie the material back to their own stores. I also believe that it was a great review for me at the field level. It was overall, a great presentation and I believe that my region and the organization will benefit greatly from it.”

The current status within my own organization is that the program is now a credited core curriculum. After employees have taken the program, their names and pin numbers are entered into the proprietary training system that allows them to receive credit. The credit is added to their permanent file.

There is a great deal of support from the entire organization and field supervisors are requesting the program to be facilitated within their own areas.

 

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